Alibaba CEO Jack Ma doesn’t think the daily deals market is dead.
In an SEC filing late Friday the company revealed that it acquired nearly 33 million shares of Groupon in the fourth quarter. That’s a 5.6% stake, making Alibaba the fourth-largest owner of Groupon.
Shares at Groupon quickly exploded, rising by more than 42% in afternoon trading. That follows a 30% increase on Friday when the company announced a surprise profit and sales that beat Wall Street expectations.
Groupon was suffering over the last 12 months as its stock plummeted by nearly 60%. The company, once worth $6 billion in a failed Google acquisition, watched its market valuation fall to $2.3 billion.
In September, the company announced that it was cutting 1,100 jobs, mostly from international operations.
Amazon shut down its daily deals site Amazon Local late last year. LivingSocial has also been struggling, laying off about 200 people, or 20% of its staff in 2015.
It’s still unclear what plans Alibaba has for Groupon. The company has been struggling to remove counterfeit goods from its Taobao and Tmall sites. Alibaba shares are down 20% in 2016, despite solid sales growth.
Shares at the e-commerce company are up 9.02% as of 11:04 AM Central.
It appears that Alibaba is strengthening its overall position by investing in a variety of companies. It has invested in Snapchat, Lyft, dating site Momo, and “China’s Twitter” platform Weibo, among others.